Pending home sales rise 1.0 percent in December

 @ibtimes
on February 02 2010 12:24 PM

Pending sales of previously owned homes edged up as expected in December, a survey showed on Tuesday, which should help to calm fears of renewed weakness in the troubled housing sector.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in December, rose 1.0 percent to 96.6 after falling sharply in November as the boost from the initial tax credit for first-time buyers ebbed.

Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, would rise 1 percent in December.

Compared to December 2008, the index was up 10.9 percent.

The Realtors group said the tax credit was skewing housing data and the market remained on a firm recovery path.

There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded, Lawrence Yun, the group's chief economist. These swings are masking the underlying trend, which is a broad improvement over year-ago levels.

The tax credit, which had been scheduled to end in November, was expanded and extended until June. It has affected existing home sales, which in December recorded their slowest sales pace in four months.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)

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